Advisor optimism slightly falters between quarters as anxieties surrounding volatility and uncertainty grow

Registered Investment Advisors (RIAs) have higher concerns about the overall economic outlook compared to the first half of the year, according to the newest Economic Outlook Index released today by Security Benefit in partnership with Greenwald Research. The index found that the RIA sentiment on economic conditions from a range of 0 (extremely pessimistic) to 100 (extremely optimistic) fell to 53 after remaining steady at 58 in the first and second quarter of the year.

“RIAs are shifting their strategies to accommodate for growing volatility heading into the end of the year,” said Mike Reidy, National Sales Manager, RIA Channel at Security Benefit. “Markets don’t like uncertainty, and that’s what we’re dealing with. During an election year, it’s very common for markets to experience short-term volatility due to speculation around potential policy changes. As global conflicts and the election continue to foster uncertainty, it is important that RIAs build client strategies that look to the future and consider downside protection. Data and market fundamentals suggest that long-term investors should maintain a steady course.”

Some advisors believe rate cuts will take place faster than they rose

Following the Federal Reserve’s half percentage point reduction in September, nearly one in four (24%) RIAs expect that there will be four or more rate cuts within the next three months.

While advisors may disagree on how many more cuts the markets could expect through the end of the year, they have shifted their views on a possible recession. In the second quarter survey, 42% of RIAs saw at least a moderate likelihood of recession in 12 months. Now, that number has jumped to 52% seeing at least a moderate likelihood of recession in 12 months. Annuities may be an option to consider during a possible recession, as they offer ways to earn interest credits while protecting principal.

Countdown to the election

While market volatility is expected during presidential elections, past historical data has shown resilience and growth over the long term. Given this knowledge, 86% of advisors have reported that they have not changed their investment strategies due to either political campaign.

As the presidential election a month away, Security Benefit also measured the impact RIAs believe its outcome could have on equity values. Between the candidates, nearly 6 in 10 (57%) of advisors think that a former President Trump victory will cause equity values to rise and 51% believe that a Vice President Harris victory will cause equity values to fall. Though anxieties remain high, on average the S&P 500 has generated a 7% gain during presidential election years.

Methodology

In August 2024, Greenwald Research surveyed 100 registered investment advisors from across the United States, each managing significant assets and directly interacting with clients. The online questionnaire collected crucial data on RIAs’ business practices, economic outlook, financial product usage, and client demographics. This method blended quantitative and qualitative insights, capturing key trends within the financial advisory industry.

About Security Benefit

Security Benefit Life Holdings (“Security Benefit”), through its subsidiary Security Benefit Life Insurance Company (SBLIC), a Kansas-domiciled insurance company that has been in business for more than 132 years, is a leader in the U.S. retirement market. Security Benefit together with its affiliates offers products in a full range of retirement markets and wealth segments for employers and individuals and held $52.8 billion in assets under management as of June 30, 2024. Security Benefit, an Eldridge Industries business, continues its mission of helping Americans To and Through Retirement^®. Learn more at www.securitybenefit.com and follow us on LinkedIn, Facebook, or X (formerly Twitter).

About Greenwald Research

Greenwald Research is a leading independent research and consulting partner to the health and wealth industries that applies quantitative and qualitative research methods to produce insights that help companies stay competitive and navigate industry change. Leveraging deep subject matter expertise and a trusted consultative approach since 1985, Greenwald offers comprehensive services to answer strategic business questions.

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